U.S. Payroll to Population Rate at 45.1% in September

by Jenny Marlar

West North Central region has highest P2P rate, at 48.1%

WASHINGTON, D.C. -- The Payroll to Population employment rate (P2P), as measured by Gallup, was 45.1% for the month of September, a slight decline from 45.3% in August, but more than a full point's improvement over the 43.8% found in September 2011.

Gallup's Payroll to Population metric estimates the percentage of the U.S. adult population aged 18 and older who are employed full time for an employer for at least 30 hours per week. P2P is not seasonally adjusted.

These results are based on Gallup Daily tracking interviews, conducted by landline and cell phone, with more than 30,000 Americans throughout the month. Adults who are self-employed, working part time, unemployed, or out of the workforce are not counted as payroll-employed in the P2P metric.

P2P is calculated based on the total population, not just those in the workforce. Unlike traditional employment metrics, which are reported as a percentage of the workforce, Payroll to Population accounts for people moving in and out of the workforce, which is a better barometer of the economic energy of the country. P2P will decline if people become unemployed or leave the workforce entirely and will improve as people find full-time work or re-enter the workforce to work full time. This stands in contrast to unemployment rates, which actually can artificially improve as people drop out of the workforce.

P2P experiences seasonal fluctuations, as do other employment rates. Based on Gallup's previous two years of data, a dip from August to September is to be expected. In September 2010, P2P dropped to 43.3% from 44.2%, almost a full percentage-point change. In 2011, it declined to 43.8% in September from 44.0% in August, a 0.2-percentage-point change. Given the data from the previous two years, the 0.2-point decline this September is to be expected and is not necessarily a sign of trouble in the workforce.

West North Central Region Has Highest P2P Rate, East South Central Has Lowest

P2P rates differ considerably by region. In September, the West North Central region had the highest P2P rate, at 48.1%, well above the national rate of 45.1%. The states in the West North Central region include Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas. The East South Central region, which includes Kentucky, Tennessee, Alabama, and Mississippi, had a September P2P rate of 40.5%, the lowest of all regions, and almost five points below the national rate.

Implications

Payroll to Population is an important measure of the U.S. economy, and will improve as jobs are created and people find full-time work. Although the self-employed are not counted in the P2P rate, entrepreneurs are an important part of job creation. As the economy expands and the self-employed are able to grow their businesses, additional jobs will be added, improving the overall P2P rate.

Although September's slight dip is likely part of normal seasonal fluctuations, any significant job growth as the economy recovers will result in month-to-month increases in the P2P rate, regardless of seasonality. The months to come will need to post positive numbers to indicate any real change in the job climate.

Gallup.com reports results from these indexes in daily, weekly, and monthly averages and in Gallup.com stories. Complete trend data are always available to view and export in the following charts:

Survey Methods

Results are based on telephone interviews conducted as part of Gallup Daily tracking from Sept. 1-30, 2012, with a random sample of 30,331 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia, selected using random-digit-dial sampling.

For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±1 percentage point.

Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample includes a minimum quota of 400 cell phone respondents and 600 landline respondents per 1,000 national adults, with additional minimum quotas among landline respondents by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cell phone numbers are selected using random-digit-dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.

Samples are weighted by gender, age, race, Hispanic ethnicity, education, region, adults in the household, and phone status (cell phone only/landline only/both, cell phone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2011 Current Population Survey figures for the aged 18 and older non-institutionalized population living in U.S. telephone households. All reported margins of sampling error include the computed design effects for weighting and sample design.

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

For more details on Gallup's polling methodology, visit www.gallup.com.

U.S. unemployment, as measured by Gallup without seasonal adjustment, was 7.9% for the month of September, down slightly from 8.1% for August. Seasonally adjusted unemployment was 8.1%, unchanged from August.

U.S. nongovernment workers reported worse job creation conditions in September than they have in any month since February. At the same time, state and local government workers continue to report significantly improved conditions.